The state’s real estate market in bad shape

Half of Utah’s population unable to buy even an average-priced home

The housing situation in Utah and Millard County is grim.

It is constantly mentioned at local town hall meetings these days.

It was mentioned at last week’s special county planning and zoning meeting, for example, where changes to the Intermountain Power Project conditional use permit – council listed all the impacts the county wanted. mitigate as part of the project’s switch to hydrogen and natural gas – were voted on and sent to the departmental commission with a positive recommendation.

One of the big questions, of course, was where would housing come from for the thousands of workers and more who were to arrive in Delta in a year or two.

The same conversation takes place at Fillmore.

New businesses and new jobs are on the horizon. Growth moves up and down Interstate 15 and is expected to change the character of this city. But where are all these people going to live?

Even now, jobs are plentiful on both sides of the county, but housing scarcity prevents many from filling these positions.

There is simply no place to live and not enough new housing on the horizon to make a big dent.

A new report released by the Kem C. Gardner Policy Institute at the University of Utah illustrates what is happening locally and statewide. Entitled “The State of the State Housing Market,” the research report represents the inaugural effort to better understand what is happening in the Utah housing market and how it is affecting the growing population of Utah. State. The policy institute plans to publish similar market research and analysis each fall.

One of the report’s most surprising findings is that house prices have risen so rapidly over the past year, that now more than half of the state’s population cannot even afford a home at the price. median. And the number of current tenants totally excluded from home ownership has increased from 63% in 2019 to almost 73% in 2020.

Home prices in Utah have a history of rapidly accelerating,” the report said among its key findings. “In the second quarter of 1994, the state dominated the country with an 18.3% price increase, and again led in the second quarter of 2006 with a 17.2% increase. But those two price spikes are pale compared to the 28.3% increase in the second quarter of 2021, which ranks second among all states. ”

Utah was only passed by Idaho, which saw home prices rise more than 37% from second quarter year-over-year comparisons between 2020 and 2021.

Much of the skyrocketing home prices are mostly felt in urban centers in Utah.

“Of the 15 Utah cities with more than 50,000 residents, 11 have experienced price increases of more than 30%,” according to the housing analysis. “Certainly for most, if not all of these cities, the wins have broken all records. Price increases of 30% were unknown in Utah before 2020-2021. ”

Even in rural areas such as Millard County, prices have risen by double digits, locally by 11.5% between the January quarter through June 2020 and the same period in 2021, according to the research report. This county might actually consider itself lucky in that regard: House prices have increased by 43.3% over the same period in Beaver County, 32.8% in neighboring Juab County and 48.3%. , 6% in Sevier County.

Adam Richins, the county town planner who also inspects new construction, said demand for new housing in Millard County exceeds the ability of local contractors to complete projects.

According to the research report, the pandemic and disruption in the building materials supply chain – the report notes that 30% of residential building materials are imported from China – have exacerbated an already dire situation.

A local entrepreneur said he is busier now than he has been in nearly 45 years in the construction industry.

Bevan Johnson and his B&J Construction Inc. in Fillmore is a full service home builder. He says that while he has not suffered from the supply problems of some of his colleagues in the more populated areas, he has many projects waiting for his workers to succeed.

“I have been in this business for over 40 years and have never seen it so busy,” he said. “We had nine houses under construction at the same time last summer. We currently have five queuing up waiting for us to reach them. It’s a good occupation for us.

Johnson said he credits local company Roper Lumber for maintaining his materials business.

“A lot of the challenges our friends and associates face outside the region, I haven’t seen them. Shortage of materials, I was able to get wood, I was able to get concrete, our suppliers here have done a magnificent job, ”he said.

Johnson said he was more concerned today about the lack of young tradespeople joining the building professions. He lamented that schools across the country are eliminating workshop-style programs and essentially reducing the number of young people entering the construction workforce at a time when older builders are leaving and retiring.

“We are going to suffer from this for a long time, for many years to come,” he said. “There is currently a huge shortage of artisans which is worsening day by day. The number of people who retire, there’s no one to replace them, ”Johnson said.

While new home construction is limited by the cost of materials and the availability of contractors to do the job, the existing home market is downright insane.

“Even the craziest days of the 2005-2007 housing boom can’t match the past 12 months, with bidding wars, lack of inventory, bids above selling prices and days of falling market.” , depending on the state of the state. Housing Market Report. “In the summer of 2021, the median number of days on the market was only six, that is, six days from the time a home was listed until an offer was made. accepted. ”

In 2006, the median number of days an existing home was on the market was just over two weeks. In the summer of 2020, it had been exactly two weeks.

“No other statistic is a better measure of the growing imbalance between supply and demand for housing than the median days in the market. Six days on the market send a strong signal of a serious housing shortage, ”the research report notes.

Likewise in Millard County, both buyers and realtors have observed a microcosm of this, as stocks have gone down, prices have gone up, and listings appear and then disappear within days.

And the research report’s biggest finding, taking all of this into account, is that this situation is simply unprecedented for the state.

You can access a copy of the Housing Market Report online by going here:

About Justin Howze

Check Also

Lennar offers 1,335 homes and a golf course in Homestead

Stuart Miller of Lennar (Lennar, iStock) Lennar is launching a 1,335 home and golf course …